The outlook for retail propane prices this week is grim, as a recent disruption higher up the supply chain has trickled down through the market. Last week, wholesale prices spiked (more than 28 cents), taking a big bite out of the rack-to-retail margins for dealers. So we figured these gains would get passed along to customers in short order.
And fortunately it’s no 28 cents, but the first indications are that residential propane is on the rise. The Maine Office of Energy Independence and Security says the average price for a gallon of retail propane is up nine cents (or 3-percent) since last Monday, according to the state’s public broadcasting network. The average is based on a 925-gallon burn for the year.
The Pine Tree State will probably set the tone for propane around the country this week. So despite the warming weather and slacking demand, we’re guessing the retail side has one more price hike left for us before it simmers down for the spring. Though we’ll have to wait until tomorrow afternoon, and the federal weekly roundup, to see just how severe the increases are.
Meantime, propane hub prices in Texas are settling back down to two-week lows, after their recent volatility. So it may be cold comfort for anyone who just filled up the tank, but we’re guessing that propane prices will correct themselves downward by next Monday.